Frontrunning: December 24
- Edward Snowden, after months of NSA revelations, says his mission’s accomplished (WaPo)
- Japan’s Nikkei 225 Extends Six-Year High on U.S. Data (BBG)
- Retailers blend stores, e-commerce to snag holiday stragglers (Reuters)
- Storm wreaks havoc in Britain, France ahead of Christmas (Reuters)
- Big Rally to Pump Up Wall Street Bonuses (WSJ)
- Obamacare Sign-Up Extended as Record 1 Million Use Site (BBG)
- Merkel Hits Wall With Europe Fix (WSJ)
- Boaz Weinstein Loses for Second Year as European Bet Sours (BBG)
- UniCredit has reached an agreement to sell almost €1 billion in nonperforming loans to Cerberus (WSJ)
- U.S. mortgage applications fall as refinance hits five-year low (Reuters)
- Cohen Said to Have Warned Friend About Possible Federal Investigation (NYT)
- ‘Duck Dynasty’ Dad Risks $500 Million With Gay-Sin Remark (BBG)
- Wall Street Landlord Loses Round One in Ohio School Tax Fight (BBG)
- Target meets with state attorneys as lawsuits pile up (Reuters)
- Any corruption in Turkey will not be covered up: President Gul (Reuters)
- Pentagon Probes Firm for Violation of Iran Rules (WSJ)
- Khodorkovsky Pardon Signals Putin Rift With Russia Oil Czar (BBG)
Overnight Media Digest
* A strong rally in financial markets over the past two months is expected to add a last-minute boost to bonus packages for Wall Street's traders and investment bankers, partially offsetting an otherwise grim year.
* U.S. companies are showering cash on shareholders, powering the stock market's record-breaking rally. Share buybacks and dividends are reaching levels unseen since before the financial crisis, as persistent economic uncertainty prompts cash-rich companies to reward shareholders rather than invest in other activities.
* Phoenix-based mining and energy company Freeport-McMoRan Copper & Gold awarded Chief Executive Richard Adkerson shares currently valued at about $36 million to compensate him for agreeing to give up rights to severance pay.
* Target Corp, working to contain damage from a 20-day breach of credit and debit-card security, held a conference call with several state attorneys general, to update them on the investigation.
* Carlyle Group is in exclusive talks with Johnson & Johnson to acquire the health-care company's blood-testing unit, which is expected to fetch about $4 billion, according to people familiar with the matter. The unit can screen for viruses like HIV and hepatitis C. It also makes tests that help diagnose a heart attack and assess damage to the heart.
* Jos. A. Bank Clothiers Inc rejected a roughly $1.5 billion acquisition offer from men's clothing retailer Men's Wearhouse Inc, which replied by saying it might seek seats on its rival's board.
* Walt Disney is adding Twitter Inc co-founder Jack Dorsey to the board. The company also said compensation for Chief Executive Robert Iger fell 15 percent to $34.3 million in its latest fiscal year.
* T-Mobile US Inc has teamed up with Facebook Inc to offer users of its GoSmart Mobile prepaid service free wireless access to the social network. T-Mobile has been boosting its postpaid customer rolls to turn around a long-struggling business. Facebook, meanwhile, may get wider access to wireless users who wouldn't otherwise have a connection to the social-media site.
* Tribune Co said it will buy Sony Corp's unit Gracenote Inc, best known for a large database of music data that is used by music services, for $170 million. The Chicago-based media company said Gracenote will be combined with Tribune Media Services, which sells TV listings to cable operators and other customers, as well as movie show times and other data.
* Rolls-Royce Holdings PLC on Monday said the U.K.'s Serious Fraud Office has opened a formal investigation into foreign bribery and corruption allegations involving employees of the U.K.-based jet and marine engine maker.
The International Finance Corporation, the World Bank's private sector lending arm, has toughened rules for staff engagement with client companies after controversy over the way two executives jumped to groups that had received investments from the body.
More than 6m children stand to benefit from higher returns and lower charges on their savings after the Treasury announced plans to lift a ban on the transfer of poor value "zombie" Child Trust Fund accounts into Junior Individual Savings Accounts.
There was no stopping equity bulls in the run-up to the holiday season as US stocks climbed to record highs and European bourses advanced for a fourth successive session.
BTG Pactual is to double its London staff by the end of next year, as the Brazilian investment bank embarks on a global hiring spree to build its fledgling commodities business.
The UK Serious Fraud Office has launched a criminal investigation into allegations of bribery and corruption at Rolls-Royce, the leading aircraft engine maker.
* After a flood of visitors to the HealthCare.gov site on Monday, White House officials established a 24-hour extension for consumers to sign up for Jan. 1 insurance coverage under the Affordable Care Act. The grace period was the latest example of the administration's willingness to fiddle with deadlines that once seemed set in political concrete.
* Airlines are shrinking the size of their seats, raising revenue but also tensions between frustrated passengers. Over the last two decades, the space between seats, hardly roomy before, has fallen about 10 percent, from 34 inches to somewhere between 30 and 32 inches. Today, some airlines are pushing it even further, leaving only 28 inches.
* The Energy Department, environmental groups and the companies that deliver television signals to 90 million homes announced an agreement on Monday to tame "vampires," the term used for devices that use electricity even when they are turned off. Such devices, which include set-top boxes like DVRs, as well as cable and satellite receivers. The agreement will save consumers more than $1 billion a year, both government and industry officials said.
* SFX Entertainment Inc, a dance-focused new company founded by the media mogul Robert Sillerman, announced on Monday that it had struck a global marketing partnership with Anheuser-Busch InBev, whose brands also sponsor mainstream events like the Super Bowl and Major League Baseball games. Terms of the deal were not disclosed.
* Hotels in the United States are offering rooms and meeting facilities for short periods, seeking to wring greater revenue out of their properties. American hotels like the Hilton Garden Inn Chelsea in New York and the Sofitel Miami are following the micro-stay model and appearing on day-use booking sites.
* Elliott Management, the New York-based hedge fund company founded by Paul Singer, reiterated Monday that it had no plans to participate in a tender offer by McKesson Corp for the German pharmaceutical wholesaler Celesio unless the deal was sweetened. The hedge fund has an economic interest of more than 25 percent in Celesio.
THE GLOBE AND MAIL
* Toronto city councillors are divided over whether Mayor Rob Ford should have called a state of emergency in the wake of downed power lines, freezing temperatures and hundreds of thousands of people without hydro in their homes following Sunday's ice storm. In an emergency, Ford would have to relinquish his mayoral duties to Deputy Mayor Norm Kelly as per a council decision that recently stripped Ford of some of his powers. However, the decision on whether to call a state of emergency remains Ford's under the law.
* Within three hours of the Joint Review Panel giving conditional approval for Enbridge Inc's proposed Northern Gateway pipeline, the Lake Babine First Nation threatened to proceed with the lawsuit it has been preparing for months. The aboriginal community, based around the Babine Lake in British Columbia, has already retained one of the top aboriginal law experts in Canada.
Reports in the business section:
* Canadian insurers are grappling with the prospect of financial damage from yet another severe storm, capping off a brutal year that raised serious questions about how the industry will deal with the costs of climate change.
* Imperial Oil Ltd told regulators the estimated cost of its long-delayed Mackenzie Valley Project has surged more than 40 percent to at least C$20 billion ($19 billion) since its last tally almost seven years ago, and that it has no idea when North American gas markets might turn around to rescue the project from limbo.
* OMERS Private Equity, the private equity arm of the Ontario Municipal Employment Retirement System, has agreed to sell Maxxam Analytics International Corp to French company Bureau Veritas SA in a deal valued at about C$650 million including assumed debt. Maxxam Analytics operates a network of laboratories across Canada that serve the energy, environmental, food and DNA industries
* Shares in Reitmans Canada Ltd rose 6.9 percent on Monday, following an announcement by Toronto-based Fairfax Financial Holdings Ltd that it now owns 13.8 percent of Reitmans' Class A shares. Fairfax, which is led by Prem Watsa, is now the second largest investor in the retailer behind a group of Reitmans' directors and senior officers.
* A paltry 9 percent of Canadian adults, fewer than one in 10, meet the criteria for "ideal" cardiovascular health, says a new study based on nearly half a million Canadians.
* The massive ice storm that has caused havoc in Toronto just days before Christmas, leaving hundreds of thousands without power and snarling public transit, is also expected to have a "negative impact" on the crucial holiday shopping season, prompting some retailers to stay open later and give people more time to get those last-minute gifts.
* The Bank of Canada announced Monday that deputy governor John Murray will step down on April 30. Murray, who has been a deputy governor since in January 2008, has overseen the central bank's analysis of domestic and international economic developments.
- Chinese police have arrested a gang in Shanghai and Beijing after it made over $50,000 dealing in black market personal information. Police said they had seized data belonging to nearly a million people.
- Migrant children in Shanghai will be able to enjoy the same rights as local children from next year, if their parents have a city residence. In some cases there will also be a points-based evaluation, authorities said on Monday.
CHINA SECURITIES JOURNAL
- China will hold its quota for rare earths exports stable in 2014, Shen Danyang, spokesman for China's Ministry of Commerce, said on Monday. International demand for rare earths fell short of China's export quota this year.
- China's net foreign financial assets amounted to $1.8 trillion by the end of September, according to the State Administration of Foreign Exchange.
SHANGHAI SECURITIES NEWS
- Only five of the original 40 companies listed on the Shenzhen composite exchange still remain, highlighting the changes that China's economy has seen over the last two decades.
- Plans for a free trade zone (FTZ) linking China's southern Guangdong with Hong Kong and Macau has undergone high level inspection and has a good chance of receiving approval. Some sources said it will be even bigger than Shanghai's FTZ.
- China's anti-corruption watchdog will crackdown on extravagance and excess behind close doors in private clubs, the Central Commission for Discipline Inspection said on Monday.
- China should cultivate and practice the core values of socialism, in order to achieve the "China dream" to realize national prosperity, said a commentary in the paper that acts as the Party's mouthpiece.
SFO STARTS FORMAL PROBE INTO BRIBERY AT ROLLS-ROYCE
The Serious Fraud Office has launched a formal investigation into allegations of bribery and corruption at engine maker Rolls-Royce that could lead to criminal prosecutions.
COMPANIES COULD BE FORCED TO REVEAL SCOTTISH INDEPENDENCE RISKS
Britain's biggest companies could be forced to give investors an assessment of the risks arising from Scottish independence. Lawyers have told directors of major companies they should consider including an update on the impact that a "yes" vote in favour of independence would have on their operations.
ROYAL MAIL'S FTSE 100 DEBUT SPARKS PROFIT-TAKING BY SHARES INVESTORS
Royal Mail has been a spectacular stock market performer since its flotation in October, but its debut in the FTSE 100 yesterday was an excuse for investors to cash in some of their gains.
CHRISTMAS DAY COULD BE BIGGEST YET FOR ONLINE RETAILERS
The last-minute festive shopping rush is set to spill over into a record-breaking online Christmas Day splurge with 117m visits to retail websites expected on the big day itself.
BT LIGHTS UP THE END OF THE LINE
Some of Britain's most remote households soon will be connected to superfast broadband after BT signed up three companies to lay subsea cables between the mainland and the outer islands of Scotland.
SWAPPING BRITISH GAS HOT SEAT FOR DRIVING SEAT AT THE AA
A former energy executive who took the flak from customers through years of price rises at British Gas is to move into the driving seat at the Automobile Association.
WEATHER DAMAGES 'BIGGEST XMAS SHOPPING DAY'
A predicted high street spending spree dubbed 'Manic Monday' has largely failed to materialise, with strong winds and heavy rain combining to force late-Christmas shoppers indoors.
Fly on the Wall 7:00 AM Market Snapshot
Allergan (AGN) upgraded to Outperform from Market Perform at Wells Fargo
Eagle Rock Energy (EROC) upgraded to Outperform from Market Perform at Wells Fargo
Enbridge (ENB) upgraded to Conviction Buy from Buy at Goldman
Engility Holdings (EGL) upgraded to Buy from Fair Value at CRT Capital
CalAmp (CAMP) downgraded to Equal Weight from Overweight at First Analysis
Heartland Express (HTLD) downgraded to Hold from Buy at Stifel
Archer Daniels (ADM) initiated with a Hold at Stifel
CECO Environmental (CECE) initiated with an Outperform at Boenning & Scattergood
Cumulus Media (CMLS) initiated with a Buy at Ascendiant
EVERTEC (EVTC) initiated with a Buy at Stifel
Extended Stay America (STAY) initiated with a Buy at Deutsche Bank
First Busey (BUSE) initiated with a Neutral at DA Davidson
Houghton Mifflin (HMHC) initiated with a Buy at Goldman
Houghton Mifflin (HMHC) initiated with a Buy at Stifel
Houghton Mifflin (HMHC) initiated with a Neutral at Piper Jaffray
Houghton Mifflin (HMHC) initiated with an Outperform at BMO Capital
Houghton Mifflin (HMHC) initiated with an Overweight at Morgan Stanley
NGL Energy Partners (NGL) initiated with a Buy at UBS
QCR Holdings (QCRH) initiated with a Buy at DA Davidson
Telecom Italia (TI) re-instated with a Neutral at Credit Suisse
TransCanada (TRP) initiated with a Neutral at Goldman
MGM Resorts (MGM) found to be suitable candidate for casino license in Massachusetts
Brookfield Infrastructure (BIP) to invest $350M in South America with institutional investors in VLI stake (VALE)
Caterpillar (CAT) committed to a restructuring plan for Gosselies, Belgium operations
Baxter (BAX) initiated recall of select lots of injections
Companies that beat consensus earnings expectations last night and today include:
- Stocks rose to another record yesterday propelled by investors' surprisingly positive response to the Fed’s decision to start withdrawing its post-crisis stimulus. Now that the Fed has removed a key element of uncertainty from financial markets, many investors say the coast is clear for further gains, the Wall Street Journal reports
- The number of music-streaming services is set to explode next year, as record labels have warmed up to the idea of renting consumers access to a vast collection of tunes, rather than selling them individual albums or songs (P, AAPL, AMZN, VIV, SNE, LEAP, SSNLF, GOOG), the Wall Street Journal reports
- Retailers (WMT, TGT, GPS, EBAY, M, KSS) are trying new ways to win over Christmas procrastinators. More customers this year will be able to pick up in stores today orders placed online. For retailers, it can mean lower shipping costs - protecting profit margins, and the potential for more last-minute business, Reuters reports
- Dallas Fed President Richard Fisher, who will be a voting member of the policy-setting committee next year, said he argued for a $20B reduction in the Fed’s monthly bond purchasing pace instead of the $10B announced last week, Bloomberg reports
- As Chinese President Xi Jinping promises the nation’s biggest market opening in two decades, the reality for some of the most successful foreign companies (SBUX, QCOM, AAPL, VLKAY, FUJHY) in the country is a raft of probes and laws that curb their operations, Bloomberg reports
Dara BioSciences (DARA) files to sell $12.5M of common stock
Heritage-Crystal Clean (HCCI) files $100M mixed securities shelf
Merit Medical (MMSI) files $200M mixed securities shelf
Quantum (QTWW) requests withdrawal of registration statement